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Dollar Index Hovers at 1-Week Lows With Inflation Data Ahead

Dollar remains under pressure with U.S. data on tap - The U.S. dollar continued to hover at one-week lows against other major currencies on Wednesday, as sentiment on the greenback remained vulnerable ahead of the release of highly-anticipated U.S. inflation data due later in the day.

Investors were eyeing an upcoming report on U.S. consumer price inflation data due later Wednesday for further clues on how fast the Federal Reserve will raise interest rates this year.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 89.58 by 05:20 a.m. ET (09:20 GMT), the lowest since February 6.

USD/JPY was down 0.33% at a 15-month low of 107.46 amid mounting expectations the Bank of Japan will follow the Federal Reserve and the European Central Bank's examples in normalizing monetary policy despite recent comments to the contrary by the Japanese central bank.

The safe-haven Swiss franc was steady, with USD/CHF at 0.9342.

Elsewhere, the euro was also steady, with EUR/USD at 1.2351, while GBP/USD slipped 0.14% to 1.3869.

In a preliminary report, Eurostat said euro zone gross domestic product expanded 0.6% in the fourth quarter, in line with expectations. Year-over-year, the economy grew 2.7%, also as expected.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.11% at 0.7867 and with NZD/USD climbing 0.58% to 0.7315.

Earlier Wednesday, the Reserve Bank of New Zealand said that inflation expectations ticked up to 2.1% from 2.0% for the first quarter.

In Australia, the Westpac consumer sentiment index fell 2.3% in February after a 1.8% rise the previous month.

Meanwhile, USD/CAD slipped 0.11% to trade at 1.2578.

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